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Malta – The Blockchain Island

Malta is positioning itself as a leading and friendly jurisdiction in the prominent industry of distributed ledger technologies (“DLT”) by offering its reputable and tax efficient eco-system to support this emerging sector.

From February 2017, when the government started to promote a national blockchain strategy, Malta has gone a long way. Three Bills have been approved by the Parliament and enacted into law to adopt a comprehensive regulatory framework which not only provides for various methods of recognition extended to varied types of innovative technology arrangements and innovative technology services but also ensures investor protection, integrity and stability to the financial market. A number of secondary acts and guidelines are also being issued to provide for more granularly regulation.

Owned to the above, Malta has attired the attention of the biggest blockchain names. Binance, OKEx, Neufund, Bitbay etc have already settled down in the island and others have announced their intention to make the move under the umbrella of a regime that is equipped to set the standards.

A Holistic Legal Framework

A number of jurisdictions have worked, during the last few years, to regulate the DLT related businesses. However, even the most active jurisdictions such as Singapore, Switzerland, Estonia or Gibraltar, have been mainly focused on blockchain based cryptocurrencies and initial coin offering without embracing the sector in its entire extend. Malta has accepted the challenge and made the first-mover step.

The milestones of the Maltese DLT and virtual financial assets regime gear toward the development of the innovative technology sector, by:

Establishing an ad hocAuthority to address the issues and to focus on the technology arrangements and their use cases to promote government policies, educate and facilitate the advancement and utilisation of innovative technology in use cases (Malta Digital Innovation Authority Act “MDIA” – Act No. XXXI of 2018);

Setting up a voluntary regime for the registration of technology service providers and certification of DLT Platforms (Innovative Technology Arrangements and Services Act – Act No. XXXIII of 2018)

Providing for a mandatory regime to regulate the initial offering of DLT assets, VFA Agents, and VFA Service Providers.

Pursuant to the aforementioned acts, MDIA will ensure that only the software architectures that meet certain requirements concerning system security, integrity, transparency and auditability will make their way toward the seal of quality, while Malta Financial Services Authority, the single regulator for financial services activities in Malta, is granted with the power to regulate and supervise initial issuance of DLT assets (ex.: ICO, token generation events or similar) and the operation of license holders (ex.: brokers, advisors, exchanges etc).

Our Fintech and DLT Related Services

At Charles Scerri & Associates we strongly believe that innovative technology is the future: DLT, Blockchain, FinTech, AI, internet of things are going to revolute our society and our way of doing business. As a firm we have already set up a number of structures that will operate innovative technology arrangements and our staff is being trained to provide an excellent service.

Conscious of high level standards and expertise required, implacable KYC, AML on-boarding and monitoring procedures, and our own 20 years reputation on stake, we are entrusting the task to drive us toward new achievements to a team of highly qualified staff under a separate department.